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tv   Fast Money  CNBC  September 4, 2009 12:00am-1:00am EDT

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another dip back down pulling from yesterday when we traded d about $14 million.n. i tell you what was really interesting the late surge in the financials. financials are strong all day. late surge, final hour of the day, that next leg up. that's what pushed the market. dragged along a few sectors as well. but look at the volatility index. don't read too much into it. this went down to $27 from the end of the day. near $29 all of the rest that. but i think what you have to look at right now is people have finally started pricing in the weekend. it's something that we talked about last night. impressed by the fact that we're still $29. that didn't last in the first hour of trade. suddenly they started slamming volatility because they started to price the options on the next day's date. then the next day's date. and you think see the volatility coming out. if you price it ahead to tuesday's date, it's still a $29 volatility. so be very careful about overreading. >> so 63 points a wee up in the dow a lot of that activity happened late in the day. you are talking about the big gorilla tomorrow i don't think that so many people are fearful of that. do they know the number ahead of the number? no, i'm not suggesting it.
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but a lot of late-day buying. and it's curious. it's not all about positioning. >> why do you think not fearful of that number anymore? >> i'm sorry say again? >> why do you think not fearful that number. >> i think that the projections right now are to be in the low end, the consensus is call for a loss of 230. you're seeing numbers down around 220. as low as even 200 and i think a lot of people on the street right now that feel that the unemployment number will surprise to the upside, thus a lot of strength in the financials. >> i hate to be deby downer -- >> no, go ahead, do it, do it. >> debby downer. >> we expect nothing less, deby. >> but you know, you're talking about gorillas in the room, two tech gorillas, intel and ibm, spent most of the day lower. i think intel closed lower. ibm closed right around unchanged. you know what to me, those are the leaders. they were the leaders on the way up. then they lagged. now they're starting to trade lower. maybe ahead of something. again, something to point out but the action, the price action in those two stocks over the last week and a half, scare me.
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>> hey, listen, deby, i agree with what you're talking about right now, but look at other one, the canary. goldman sachs today. very, very strong day. nice rally all day long it was strong. finished the day here in the highs of the day. so that is another one. so you don't have to be a full debbie this whole picture. >> yeah, you can be a half deby. >> yeah, a deby. >> a deby light seen in the stress test back in may they used the condition of unemployment. so when proving unemployment bodes well for the financials, that potentially lines up as your trade tomorrow to buy the financials on a better than expected number. >> all right, let's move onto the next trade and talk about a sector that was popping today. retailers in the spotlight after posing generally than expected in august. costco closed higher by more than 6% -- % i think is the number. we had a number of these in the seconder. we had a number of nice moves. for one, j-crew.. we talked about that yesterday.. >> she's all over that, the analyst yesterday. karen and i talked about valuations. i still don't love it on a valuation basis. had a nice day today. look at gap. look at old navy, north america did. comps were up. >> talk about trading down. >> 4%.
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they were down 9%. i mean, old navy, that hasn't had positive comps since -- >> are you listening to those people? >> no, but i mean gap trading 21 bucks. i didn't think it would get this high. this stock has been a monster. again i think that they're way ahead of themselves but you have to give kudos to the boys and girls at the gap. >> and i'll give tjk some kudos. and then a yellow, red flag, a little debbie light, take a look at ab crop by & fitch, dell adviser's. the bar's been set very low. most everybody's exceeded this low bar. some of the other names did not, and they were punished, because with the bar set so low, if you're not beating right now, they're going to beat you. >> yeah and at the risk of being a little debbie myself. >> there is a little debbie in everybody. >> i think probably more in guy than in me. but i do think when you talk about a minus two when expected was minus 5.4, that's excellent. people talked about the international sales as being a bright spot. first of all, that's 8% of the revenues. not that big of a deal for costco. i wouldn't get all that excited. the retail analysts, the
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question for them was to to month, we bottomed on same store sales. i don't think that's the case. everybody says the fourth quarter is to be excited about, but that's because the fourth quarter of 2008 was so poor. >> comp is official.l. >> yes. >> same-store sales will go positive obviously october and now. look at the fund mektss inside the numbers are you seeing. inventories are low. they're being worked on off. you see the retailers reaching for inventory right now, so the retail space clearly the trough is in. >> absolutely. let's move on, talk about the "chart of the day." >> what do we got? to we've got gold. a little gold here. continuing with the breakout of day. it looks like it is in fact headed to that $1,000 an ounce level. a new six-month high. only $4 away from a thousand bucks. >> giddyap all of you gold people out there! you know what -- >> you -- yeah. >> you know what i will say it all of the time. i've never told you to go short. >> a downer. >> $1,500 and i won't believe it but it's working right now. >> well, two things that are
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working also very well are the fact that people are buying gold for a couple of different reasons. either you believe that there's a rationale demand -- india, china -- seasonal buying going into festival. et cetera. you believe a reverse bottom trade.e. the bottom line is there may be inflation trickling back into things. and we talked about it a couple of days with china's pmi number. they see price inflation there. you want to buy gold into that environment. nobody here at this desk who tell you they don't want to own gold long terpg. the question is what portion of your portfolio should be in gold now? i think a bigger part than most people -- >> said something like 5%. >> 2% to 3%. that was the big question. we wondered about gold because i was curious because we've been talking about gold, talking about gold. well, how much should you own? he said 2%, 3%. that seems like a very, very small amount, really, so far as your exposure level. and you just got to wonder, what -- we talk about it every night. and i know that guy's traded this for a long, long time as well. but that ride up is very fast. that ride down's even faster when they pull the rug out of you. >> the guys at the desk who is
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buying gold this week -- >> i'm still long gold. 1049. february 20th high.. the high for this year. tell take that technical number out and right now, look inside the options market. you know what, you might want to cover this on options action. the options market, itself, may are not positioned right now for the long side. everyone got off of this gold trade. kind of forgotten about it. there is the man. there is seasonalality. there is demand behind the right now in the bullion itself. they want the physical commodity. it's going to continue to go higher and make all-time highs. >> what are you doing in the options market then, since you are advising options? >> i am sitting in my gold future's position. sitting there, watching the screen. >> if you had capital right now would you put it to work at these levels? eye added it to my position. >> today. >> yes. >> at what level? >> 98350. >> all right! >> and what's different about this gold rally for the miners is that people have a better understanding is that these gold miners are especially not locked
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into long-term contracts at gold. but in fact they're leaner and meaner and buying a selling at spot, which means this is all going to their bottom line. >> all right, let's stick with the commodities and talk about some of the other metals out there. and as well as miners and producers. shares of alcoa higher today after raising its demand outlook for china. expect the country's metal consumption to actually rise 4% this year and this certainly goes hand in hand, tim with, the china outlook and the nice rise in the shanghai market. >> shanghai was up because their officials, their s.e.c., out there saying looking for a stabile and healthy market. kind of weird when the guys are who be are looking for market credibility are actually talking up and down their market. but that's for another point. alcoa's ceo, who has been conservative at best, actually said that the china demand is going to take them from a flat year demand to possibly up 4%. still leaves aluminum demand globally down 5.5%. nothing do cartwheels over, but aluminum production has been taken down dramatically. so if you're an alcoa or if you're even some of the steel
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companies that are derivative plans in that demand that have high leverage you're the ones who are going to rally on this news. those companies with the high operational leverage, in other words, those who are leaner, meaner going into a rebound in this cycle, do very well. look at the u.s. steel, look at nucor and aks, my top plays, if you believe this story. >> know what the opposite of deby is? is. >> what? >> walter. pete knows that! >> of course it is. >> take a look at alcoa. went from 16 to 60. recently pulled back and down to 54. up 6% today. got an upgrade today. one on tuesday. someone slapped the $69 price tag. there you go, valuations are pretty reasonable on this thing. to a decent to lower tape. >> commodity space that's important to point out, look at copper today. nice intraday reversal. freeport-mcmoran was strong. natural gas, seven-year low down to $2.50, and you know what, it looks like it wants to continue to go lower. we've talked about natural gas on the desk. it is not right now a way that
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you want to invest and when you look at the commodity space. one last point on potash. we talked potash yesterday. i got long potash yesterday. i think it was guy who said he would take the other side of that. he's right on that one. be careful with potash right now. the reasoning behind that is the grain market itself is not supportive of, the fundamentals are not there. valuation pays. people want potash. but fumes really are not there. >> back to the coal trade for just a moment. when you look at what happened over the last week or two, when you see somewhere the upgrades. we talk about foster wheeler. stern a.g. last week. fluor, they love that name. it was bernstein out there talking about the idea that people are going to start going to those efficient coal-burning plants. because of that look at this stock. i mean the stock finished the day up i think near, close to $85 a share. these names continue to perform on much to those upgrades that guy was talking about. from alpha natural and some of the are names, walter energy as well.
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i'm telling you the coal trade still remains and with these efficient fire-burning plants, germany, japan, china -- there's a the love different places out there that are building these plants. >> russia, metro steel. one of the countries under the greatest amount of pressure from the government. the russian government. mtl's the ticker. the government's now actually supporting state-sponsored bonds. again, best coca-cola assets i would argue in the world. not on the faint of heart. tremendous volatility. >> pete, pride. options activity? >> deep water drillers, one of karen finerman's favorite names. kudos to her. but look at that options activity out there today. today it was the september 27 call. by the time the day was over with, the calls to puts, unbelievable. off of the charts. the stock just continued to go higher. i'm sorry. >> ama rumors? >> karen had highlighted that. >> he hates rumors. >> yeah, that's true. but you see that and you've got to wonder. >> part of the chatter really
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does make a little sense. bloomberg had a story out there today, as a matter of fact, that tied in one of the largest shareholders of pride. might have some interest in the stock. who really knows but i tell you what the activity out there is undeniable. a lot of activity. >> move onto the next trade here. what else is working today? >> what? >> higher in this volatile tape. >> of course all going to close higher. the fundamentals of the smartphone, wein what hair, they're phenomenal. it's a matter which one do you want to own? figure out. you look at palm, maybe it's on ama, potential. if you look at apple, the fourth quarter for apple lines up phenomenally. fane look at rimm, it will be rolled out here in october. the fundamentals of these names here in place. it's ia matter of which one do you want to own? >> which ones do you own? >> right now? >> yes. >> at this moment i own none of them. what's my first move i agree with pete, i think now apple's the place. >> i still own palm. i would like to take a longer look at appem i was hoping another pullback in that one but i know tim and i as far as a long time have been burned on this name but nokia -- >> yeah, ouch. >> -- the one area where you could see growth.
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they're going to lose overall. where they're going to lose is going to be apple. it's going to be the competition. it's going to be research in motion, possibly palm. but they've only got 10% exposure right now in the u.s. market. that's where they can grow. so there's some positives out there and the fact that some of the software developers, going to try to get application. >> before i let deby rain on this stock i will tell you that nokia's trying to fight apple on the app's market. in the nokia world, their big conference today in stutgard, they're the ones saying they're getting into the app. this is where they had been losing ground. if people believe that their handheld device is -- >> you're so late though. >> it doesn't matter. >> apple. nokia came out last -- >> they're late with 35% market share. the moment they start wrapping up revenues on that market sir. >> the chart has been down. >> the stock chart doesn't lie but they've made acquisitions. they're trying to get things moving the right way, but they seem to be behind the 8-ball every time.
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>> when you're the leader you can fall backwards into this trade though. they're so far ahead of people. sorry. >> hi, there. >> i happen to love. we talked about film would love to trade i just didn't love the entry point. it traded down i think 44 or so today and then it rallied late. i think that's the name you want to own. you have to be careful of these little top run. 45.5. you want to be in the sharp phone trade i think the best way. moving on. casino shares. starts to its highest ever monthly figure in the month of august rising 17%, which is great for the likes of mgm, los angeles sands. those who have the major properties, development in the hotel. >> and look at the las vegas trap and although down year over year, it's improving month over month which is good if you want to go that route.
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we talked about las vegas sands and mgm back on august 3rd when dr. j. and i were out in las vegas. >> what were you guys doing out there? >> having a good old time! >> thank you. >> hey, whatever. >> thanks, mel. >> if you want to play -- the name is pure mccow is melco international. mpel. essentially the one started by the son of the mccow gaming universe. his son has actually started to go out there and build an empire which i think is the best play. the key to mccow is if they're going to cut the gaming taxes on these, could double because taxes are still too high in mccow. >> just because is in the hospital. >> his children are still in business. his daughter pansy. >> who. >> pansy. >> a shout-out. >> get well mr. hoe. gold breaking out heading for the $1,000 an ounce mark but one guy is not buying the hype. head to the pit. big sir, rick santelli. the one and only. why are you so skeptical, rick? >> reporter: i'm not skeptical about the direction and i'm not
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skeptical that can overtake a thousand. i understand momentum. what i am skeptical about is trying to assess some high world fundamental order to the move. and i challenge all of my wonderful trading friends -- >> uh-oh. >> -- out there. do you really believe this is telling us something about an impending disaster or inflation or something going on with equities? do you really think it's anything about just another commodity? they all trade the same. they all go parabolic at some point. and they're all ugly when it ends. >> so you're saying that it's speculation that's driving this momentum? >> i hate that word speculation. >> but it sounds like that's what you're saying. just go ahead and say it, rick. >> reporter: nothing wrong with speculation. >> nothing wrong with it, absolutely. >> reporter: guy adami used to trade. >> hey! >> reporter: we traded at the same place and we're both
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chartus. probably another $11, 12 bucks we'll stop out all of the shorts and probably zoom the other way. what do you think? >> we used to say back in the day if you want to get hit by a truck go stand in the middle of i-95. i mean, i get it. this thing is a runaway train. but i also hear what you're saying because i've seen this movie -- at least i think that i've seen this movie before -- and it typically ends badly. what's that movie where the dog dies? >> which dog? >> marley. >> at the end. there you go. >> come on. >> yeah, but, rick, what's reason for this move then? i can understand, look commodities is an allocation trade and people then putting money into commodities because there's a longer term view is not only some world wide demand but trade that people are actually diversifying dollars and other fixed income. >> reporter: why in the last 72 hours? come on. listen, we have all of these etfs. i call it the cftc, etf malt. they are shaking things up or getting froth. a little apprehension going into the oil markets. and remember, who didn't get the memo? you're not allowed to really sell stocks. you're not allowed to really buy oil. and you go back to the suppression conspiracy of the
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'90s. and the government doesn't really want gold to go up. because it shows see out paper. we've heard it all, haven't we? >> big sir. >> the biggest, important part of the commodity has been china. inflation in china. >> reporter: you know what, i don't disagree with inflation. i'm the guy that's always telling you they're printing too much by lumber futures. >> yes, they are. >> reporter: but at the end of the day, why in the last three days, the dollar hasn't gone along with it. 30-year bond rate's still at 2 1/2-month lows. i don't buy it. the rest of the market's aren't buying. that there's something happening now regarding inflation that's changed gold. no, i think it's a -- basically a short squeeze. an etf question mark. and more walter mitties into the gold space and i love every one of them but nothing that incites people more than a gold rally. >> rick, how about this one, the calendar changed in september. about you go back the last five years, gold outperforms the s&p from september till december every year. also look at this, right now, right now if you look holding
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dollars themselves, dollar reserves, foreign central banks are the ones getting squeezed, because the dollar keeps going lower, lower, how does the foreign central bank protect themselves in a bad position? they're not going to go dump their about dollars.s. they're going to go buy gold and hedge against those dollars. >> reporter: that's a great question. tell me which major foreign central bank isn't in the fiat business? >> well, right now, rick -- >> reporter: a printing business. >> rick, right now, the biggest one, the biggest one lies right here in the usa. >> reporter: that's what i'm saying i agree with you. but whether it's the bank in japan, whether it's the european central bank, the mpc and the uk, the u.s., we all print too much. it's not in any of their interests in that regard to see gold doing what it's doing. i think the inflation issue is absolutely real. i think there's a million better ways than gold to ultimately play it. >> all right, rick, thanks for your time. big sir now the chicago. that was the "word on the street."
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here is what is coming up next on "fast money" -- it's the market moving moment of the week. a top economists called the job reports and then guy and the gang traded. and this house has been gravy b for your portfolio. plus, we go off the record with charles gasparino when america's postmark show continues. got nfl-sized odors in your house? febreze air effects actually eliminates odors in the air and leaves a fresh scent. febreze air effects, it's a breath of fresh air. got a wet pet in your house? febreze air effects eliminates odors in the air and leaves a fresh scent. febreze, official air freshener of the nfl.
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welcome back to "fast money" live at the nasdaq marketsite. time now to take your position. it is the report we've all been waiting for, august payrolls. will the jobs report tomorrow support the comeback in stocks or signal a double dip? michelle myer is an economist at barclays capital. she joins us from new york. always nice to speak with you, michelle. >> nice to be here, melissa. >> what should we be preparing for ourselves. >> will fall by 200,000 by august which is by no means a trivial amount but it does show a considerable slowing in the pace of job cuts from earlier this year. the smallest pace of decline since last september and it will show that labor market conditions are continuing to improve. it will show that the economy is, in our opinion, emerging from this recession. >> sorry. we were having an audio problem there, michelle. but in terms of what you think the market is expecting, do you think that they're expecting
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exactly what you have forecasted or is there going to be some element to surprise there? >> i think eye mean consensus is right around our forecast. i would imagine the market is expecting a forecast. if anything maybe expecting something a little bit better because the overall slow of the data has been quite positive, quite surprisingly positive for some indicators. for example the ism manufacturing index surged higher and the new orders component jumped into expansion territory. so i would say the overall tone of the data has been better than expected. so perhaps the market's positioning in that respect. >> hey, michelle, in terms of the market itself going forward, the recovery and growth, if you look at it, is modest growth better for the market versus a very aggressive growth model through 2010? >> i mean i think it really depends. i would say it's always better to have stronger growth, right? especially considering how big of a contraction. we've seen this has been the deepest and the longest recession in post-world war history.
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>> but doesn't that then mean that they take await easy monetary policy that's kind of fueling the recovery itself? >> it could. but, again, the fed is not going to take away of the easy monetary policy until they're sure that the recovery is strong and that it can handle higher rates and that it could handle tighter policy. so if the fed actually starts hiking interest rates earlier than we expect, it'll be because the recovery is stronger and more resilient. >> all right, michelle, thanks so much for your time. michelle meyer of barclays capital. how do we trade this. >> a couple of staffing firms and manpower, not politically correct name but ama's had a decent year. >> debbie power. >> debbie power. >> the symbol d.e.b. monster world wide. talks about that sucker all of the time. two names that you may want to go to and apollo group, these educational stops you know what times like these people have no other choice.
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nothing else do. going back to school in droves. the three names at least. >> and the incentives to go to some these online-type colleges. >> incentives. >> and we talked about same-store sales today. retail executives were interviewed by a survey. said 7 out of 10 expect 2010 to be better. the retail sector -- >> who does those surveys? >> who knows? >> i had to ask the question. >> you believe the retail sector is starting to get healthier this is the sector that could recover fastest on the employment front. probably the most lean and in terms of lackrity, able to demand in those. watch that because that's yourin? a lackrity. >> thank you. next trade here. second wave of a swine flu are back in the headlines and the cdc and other government agencies are bracing for its impacts. in fact, take a listen to the president earlier this week. >> i don't want anybody to be alarmed but i do want everybody to be prepared. we know that we usually get a second larger wave of these flu viruses in the fall. and so response plans have been
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put in place across all levels of government. >> that's a little alarming. >> when you say 50% of america will be infected by the swine flu -- >> there are 9,000 cases right now. nearly 500 deaths in the united states right now, and flu season is coming. >> with less confidence with what the government knows what they're doing on this and i think that obviously sets it up for any number of ways to actually get exposure to people that may be best positioned to be in a place where people are running to. >> all i know is that mexico somehow dealt with it. if mexico can deal with it we better be able to deal with it here but if you want to trade tamiflu, gilead, couple of positive mentions with some analysts i think that's where you are headed. >> you could go with a myriad of these biotech names and they're all out there and everyone talks to these vaccinemakers. the safest play out there, purell which is actually owned by johnson & johnson. and i'm telling you that's the place to go. i continuing adds to them and if you look at johnson & johnson,
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great exposure across a lot of different diversifications there. pharmaceuticals they continue do acquisitions. i like the direct they're going. and you're going to get the kicker. because don't think people aren't just loading up. i can tell you my kids just went off to school. they got all of the purell in the world in their bags. >> what does that say about the purell use? doesn't it eat away? >> at some point probably. but it's a defensive -- >> you know what -- >> i thought that you said it lifts up your immunity. >> i'm building up mine but i don't want my kids do that. >> the negative impact from h1n1, go out, travel in leisure, hotel lodging. those are the names that you to short. >> let's move on here to a brighter topic. >> what? >> yes, please. >> next trade. we use a proprietary screen of thousands of stocks to find ones that are breaking out and getting increasing love from wall street. what are the names that we came upon was bob evans farm. the stock recently hit a 52-week high. up 30% from year to date. consumers look for kc values. the company is well liked by analysts with 60% maintaining a buy or strong buy on the name. so is this biscuits and gravy teleary i buy? with us now is stephen davis. ceo. pleasure to talk with you. >> thank you. pleasure to be here.
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>> how do you keep the consumers coming in? are you discounting at all? how do you maintain that. >> what we've been doing is innovating at lower price points and we really try to avoid discounting. at bob evans restaurants we've been on a 30 meals for $5.99 or less strategy and many of these meals were on our menu but when we designed new products we targeted the $5.99 price point. and then we also had then doing a strategy of adding on, we do 99 cent add-ons to the bill's guest check. >> in this environment in terms of food costs in terms of your bottom line is that really the exciting part of this story? are you just another, you know, plates where people are more profitable and not necessarily bringing out the top line? >> well, i think everybody's facing challenges with the top
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line. but when you look at our restaurant, we're at the entry level point of casual dining and we're in the family dining sector. so unlike some of the higher-end price point restaurant, we are seeing a little bit more favorable trends relative to those segments and baby evans and mimi's cafe are weathering the storm maybe than better than some our competitors. >> mr. evans your stock up until june a monster run. you earned about $2.35 next year. where is the earning's growth? should i be concerned about that? or are we going to have a monster 2011? >> we gave forward guidance but we see flat net sales but over the last three years we've really focused on driving productivity. both within our enterprise and also at our restaurant levels and also within our food products business at our plants and also we transferred from a direct store delivery system to a warehouse model and working with the likes like kroger and wal-mart and others.
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getting focused that way. we'll try to stay focused through new product news and innovation. but we also continue to drive productivity across the entire enterprise. >> stephen davis, thank you very much for your time. >> yes, i'm sorry. >> no. you said bob evan, he represents the restaurant. >> i'm terrible with names. >> that was bad. >> thank you, debbie. >> let's talk about the stock. b.o.b., nice run there. loved by the street. >> the stock corrected perfectly. it went from $16 to $33. the perfect 50% correction down to $24 and change. trading now at $27. the stock does everything right. i'm just learning from where the earnings growth is coming from. the people love the stock. >> the concern that you have to have is the margin. the one question they wanted to ask mr. davis or mr. evans
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depending on how you wanted to term it but what are the margins are because this $5.99 meal deal, it sounds great and it's a value meal part of the casual dining experience, but how much is that impacting the margins. >> how do we know that you're looking at the right stock? >> good point, excellent time. >> do you who know we got on tomorrow. >> who do you got. >> mr. boy. mr. bob's big boy. >> big fan. >> mr. roy rogers, yes, could you give me insight into your margins. >> i should just leave now! no slowdown for the "pops & drops." american eagle all jumping more than 6%. welcome back to "fast upbek ♪ singer:wanted to get myself a new cell phone ♪
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welcome back to "fast money." we're live at the nasdaq marketsite in the heart of new york city. well, as we near the one-year anniversary of the collapse of lehman brothers, regulators have proposed a slew change of design to protect the system. but as charlie gasparino found out, one big player, the ratings agencies, have not significantly changed in a key area. off of the record.
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a new book the sellout, hit shelves on november 3rd. >> not showing. >> there it is, hey! >> stop it, charlie. >> i'm not going to talk. i just want everybody to look at that. >> oh for the -- >> oh, come on! >> that's it. i'm done. just keep showing that. >> all right, see you later, chaz. >> when you are humping your book you'll doing anything, right. >> what do you do to your book? >> just kidding. a lot has changed right? since last january. since the financial collapse last year which we're almost on that one-year anniversary. i think that you have better disclosure, right? we can argue about that i guess later on. but at least marginally better disclosure. there is less leverage in the system. you know, people are not taking the big risk that they took in the past especially not with mortgage bonds but one thing that hasn't changed is the rating agencies, both their role and their -- their role in the markets, in the bond markets,
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and their extremely conflicted business model. as you know they get paid by the people, the entities, the corporations, you name it. if it's a structured finance deal. they get people by the rating. and not only that but we've dane lot of research on this, a producer for "fast money" and myself, we've done our research. the bonuses of the analysts that do these ratings reflect the revenues that come from this conflicted business model. i.e., the more money the companies make from these -- from doing deals, okay, the analysts get paid more money. and that's the reason that you saw during the housing bubble, structured finance analysts, analysts that mortgage-backed securities. that blew up. at the heart of the financial crisis, that analysts who rated those got paid the most. >> chaz, stop you. quickly. because i have to ask you the question. on everybody's minds out there. >> those ratings have not stood
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the test of time. and also point out that we do have a statement pane we have statement from all of these players. we do have a statement from s&p which i will tell you lends more confusion to the matter. i mean i asked the simple and, why do structure financial analysts get paid more than municipal bond analysts. they don't answer it. indirectly like this. are not compensated on the sort of -- on the number of deals they do. >> but, chaz, is any of this going to change because of the ratings agencies? >> no. >> you go through enron -- >> no. >> nothing happens. you go through this again is anything going to happen this time around? >> my personal opinion is that the rating agencies have pictures of certain congressman and regulators involved in certain -- you know sort of perverted acts because there's no other explanation to it. because this -- they play such a huge role. and by the way, if they don't change this business model, they don't -- which obviously is not changing, we're setting ourselves up for disaster in the future. there's no doubt about that. so the only thing they could think is that they've got
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something on congressmen, on certain regulators. because the s.e.c. is making no effort to change this. my personal view is -- and this is opinion what i was stating before is pretty much fact. this is opinion, they shouldn't be in existence. there's no need for them. as a matter of fact, they make a bad situation even worse because they'd lend this sort of false security. they're actually watching stuff when they're not really watching it and by the way not necessarily fraud this is just conflicts of interest which over time erode sort of skepticism, sort of speak. >> if you look right now at the rating agencies themselves, the business model is completely broken. it is completely broken. >> absolutely. >> because their ability to downgrade in the environment of last year, right now you should be seeing some upgrades and you know what, they're frozen. they don't want to do anything right now because they don't want to make the wrong move. >> that's a good point.
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>> that tells you, that tells you the model itself. >> that's such a great point. because why aren't they upgrading now. >> they did. today. moody's. four from negative to stabile. politically difficult industry to challenge now. they came and upgraded and i would argue that's trying to score some points. you believe this is an industry which has got conflicts all over the place and doesn't know which direction it's moving and you could also argue that the upgrade is just as poorly timed on the way up. i'm not saying it was a great move. i'm saying it happened today and it had a huge impact up 8%. >> i'll tell you this in their feeble defenses to my questions over the last couple of days -- by the way, lots of e-mail traffic going around. they keep pointing out that the s.e.c. gave them a clean bill of health when they investigated it. this is the same s.e.c. i may add that gave bernie madoff a clean bill of health. i'm not comparing the rating agencies to the bernie scam. the rating agencies is missing just about every implosion of the markets known to mankind to bernie madoff but i have a hard time taking seriously when the s.e.c. says, oh, everything is okay. given what happened in the past. and i will tell you this, andrew cuomo did a pretty good investigation of the ratings and his people went on the record. they said that compensation is
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an issue. and analysts -- and here's what the rating agencies will not answer and gets to the heart of it. why work structured finance analysts paid so much more than other analysts? and why were those -- why were those ratings so much worse? >> all good questions, chaz. >> they won't answer it. >> yeah, absolutely. charlie gasparino. "the sell-off" november 3rd. mark that on your calendar. there you have it, chaz, that's for you. >> i'm cueing now. >> as he speaks sitting in his chair. what's mcgraw-hill or moody's? touch it, don't touch it. >> that conflict of interest thing is a big issue and you just have to wonder, why? why wouldn't they just eliminate that and give everybody some comfort. until you've got that no reason to actually.
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>> moody's investment services the name to me. that's the name you want to short. all right, more "fast money" coming up next on cnbc, first in business world wide. welcome to you must be looking for motorcycle insurance. you're good. thanks. so is our bike insurance. all the coverage you need at a great price. hold on, cowboy. cool. i'm not done -- for less than a dollar a month, you also get 24/7 roadside assistance. right on. yeah, vroom-vroom! sounds like you ran a 500. more like a 900 v-twin. excuse me. well, you're excused. the right insurance for your ride. now, that's progressive. call or click today.
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how you could s. welcome back to "fast money." we've live at the nasdaq marketsite. time now for our fast splash,
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when we alerts you to stock that are about to hit major milestones. gap is on the radar. in striking distance of its highest level in five years. old navy -- >> can you imagine? >> can you imagine? the turnaround at old navy. >> congrats. she had this one cold the last time she was here. she said it was going higher. way to go, d.t. i think it's rich here. and hey then i'm -- >> en fuego. >> en fuego. >> time for today's edition of "pops & drops." a pop for american eagle, it was up 8%. joe? >> teenage retail trade down. that's exactly what this is. this stock has room to run because it's being played off against aeropostale. everyone right now is short american eagle. long aeropostale. the trade is going to unwind itself right now. american eagle is going to go higher. >> ciena was up 6%. pete? >> expected to lose 13 cents. they only lose a nickel. moving forward. the ceo a lot of positive comments about the stability and the rest of it. big pop today for ciena. >> a pop for nokia. tim? >> big excitement out of nokia
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world today. their promise on the app is a reason to increase revenues in their smartphone business. >> a drop in -- >> in-depth probe. never good. never good. >> honeywell, remember that? didn't work out so well. >> no. >> pop here for sony, walkman. >> do you have one of those? >> no. the digital music player stripped apple's ipod of its best-selling title in japan for the first time in more than four years. research firm bcm reports sales of sony's walkman hit 43% last week outpacing the ipod's 42.1%. >> weren't you using walkmans in the early '80s? >> the digital walkmans. >> that was the tape -- >> the digital walk -- >> those little boxes. >> and the long hair. >> guy's got long hair. >> 8-track. >> pop here for caterpillar. up 3%, joe? >> a sweet spot for them. when the ism number goes to the
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trough to eventually rises to 50 which it has done had this is when caterpillar should do well. had trouble with 50. >> a pop today. 8% today. pete? >> another pipeline. another one of those biotechs. everyone's chatter room today. and volume was unbelievable in the stock. the options off the chart. the chart says it all but no new news. >> pop for mtl. i will not try to say that. 17% on the day. >> mechel. and when vladimir putin is saying to buy the bonds you do it and you buy the stock. it's squeezed higher. a lot of shorts in the name. >> a pop here for the cowboys. the dallas cowboys. according to "forbes"' annual list for the most valuable sports franchises the dallas football team is on top worth a cool $1.7 billion. the only other team world wide worth more in the uk's mansion -- the uk's manchester united. >> i remember jerry jones paying $200 million and everyone said
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he was nuts at the time. >> absolutely. >> nice return there then. coming up next, a man who struck gold when lehman collapsed. a new big bet. we'll reveal what it is next. or 100 pringles. both cost the same, but only the pringles superstack can makes everything pop! ♪ ♪ whoa, oh, oh, oh, oh ♪ ♪ hey, hey [ male announcer ] the choice is yours... 100 of these or 100 pringles. same cost but a lot more fun. everything pops with the pringles superstack can!
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still polishing off their temporary art collection when one man dared to call leeman a fake. david ien horn. starting back in the days of 2007 when leeman was trading at record highs the new york-based hedge started to shoert the story's institution claiming the giant brokerage was undercapitalized with huge exposure to risky foreclosure assets and later, he took his case public. >> i think there's considerable reason to believe that the numbers they reported didn't really reflect the full magnitude of the credit crisis. the risk reward in the stock is poor from a long perspective so we are short. >> others on the street demonized him for his aggressive tactics but months later leeman
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imploded. while leeman was the white whale don't think he's a big pony. now he's going long with bets on big pharma and gold miners. he saw it coming before. can he do it again? clearly he made a good bet. let's look at what he's holding now, according to the latest holdings. his top hit ten holdings. you see the names up there. you guys like any of these? >> his biggest position is the sip. so he doesn't have such a bullish view of the world. >> the overall stock market. >> einhorn had that cold and he still lost, which is amazing, since he had a rough year. the guy is a stud. g pfizer scares me. i don't like pfizer but the guy is the man. final trade after the break. i'm here on this tiny little plane, and guess what...
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it is time now for the final trade. >> simple com. >> take a look at amazon. >> these engineers keep going higher. i'm melissa lee. we'll see you tomorrow at 12:45 for the half-time report. we are first business worldwide. have a great night!
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this is big, look at the company you think you know. >> big mac, inside the mcdonald's empire. that's next on cnbc. hi, may i help you? we're shopping for car insurance, and our friends said we should start here. good friends -- we compare our progressive direct rates, apples to apples, against other top companies, to help you get the best price. how do you do that? with a touch of this button. can i try that? [ chuckles ] wow! good luck getting your remote back. it's all right -- i love this channel.
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the following is a cnbc original production. it's part of the american landscape and a global icon 50 years in the making. 50 million customers a day.
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31,000 stores around the world. >> a quarter pounder with cheese. >> can i help you? >> welcome to mcdonald's, can i help you? >> tonight, cnbc's carl quintanilla shows you mcdonald's like you have never seen it before. >> oven-dried tomatoes, peppers, lime, cilantro, really different flavors. >> go inside the secret test kitchen where new creations live or die. >> we are testing the seasonings today. >> unfortunately, there's work that needs to be done. >> see how mcdonald's trains its army of workers and how profitable the franchise can be. >> it's made you a rich man? >> absolutely. >> from a few small hamburger stands, see how a visionary named ray kroc created a food empire. >> they were selling hamburgers for 15 cents and french fries for 10 cents. and i said, that's for me. >> $21 billion a year in revenue, 2 million pounds of beef a day and a lot of controversy. >> big mac, large fry and a large coke. 1,430 calories, 59 grams of fat. >> well, you have to make choiceab


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